by YAHOO! SEARCH
Tax credit boosts November home sales
Published:December 23, 2009, 7:57 AM
Key Links
Updated: August 21, 2010, 3:45 AM
The federal government’s original first-time homebuyer tax credit spurred enormous jumps in home sales nationally and locally in November from a year ago, as the first version of the federal tax credit pushed buyers into action just before it expired.
Sales soared 55 percent in the Northeast and 46 percent nationwide last month, while closed transactions rose 16 percent in Western New York.
But median prices generally fell nationally and in the Northeast, as sales tended toward the lower-end starter homes. By contrast, prices rose 7 percent in the Buffalo Niagara region where the real estate market hasn’t suffered as much as it has in many other parts of the country.
“We’re kind of recession-proof, only because we’ve been in a recession long before other areas, and our market looks better because we’ve been like this for a while,” said John Leonardi, executive vice president of the Buffalo Niagara Association of Realtors.
Meanwhile, a merger among three upstate New York multiple listing services inadvertently wreaked havoc with recent month-to-month comparisons locally, as officials worked to integrate different systems and rules from Buffalo, Rochester and Syracuse.
Buffalo’s system used to automatically convert a pending sale to “closed” after 60 days, but Realtors in Rochester and Syracuse had to go into the system to do that manually. The new system, launched in early September, adopted the Rochester and Syracuse process, but Western New York agents didn’t change habits right away.
That has caused some discrepancies in figures from the last two months and led the Buffalo Niagara Association of Realtors to withhold October closed sales figure when the group released other statistics a month ago.
Officials say the kinks have since been ironed out, and they are now confident in the current numbers, although there are still some discrepancies in October figures for pending sales, new and active listings, and prices.
Sales of existing homes are a widely watched barometer of the local, regional and national economy, reflecting the confidence of consumers in buying a home and of the strength of housing markets nationally.
Locally, 830 sales closed last month, up from 714 in November 2008, according to the Buffalo Niagara Association of Realtors.
The spurt was widely expected, as first-time home buyers rushed to find homes and sign contracts to take advantage of the $8,000 refundable credit, part of the federal government’s stimulus package approved in February. To qualify, buyers had to close on their new homes by the end of November, spurring a rush of activity.
On a larger scale, the nine-state Northeast region registered 79,000 home resales last month, up 55 percent from a year ago, the National Association of Realtors said Tuesday. The median price, however, tumbled about 13 percent to $223,400, the worst decline of any region.
And nationally, sales of existing homes jumped 46 percent from November of last year, without adjusting for seasonal factors. The median sales price fell 4 percent to $172,600. First-time homebuyers made up half of all buyers nationally, the National Association of Realtors said.
“Up through November, the credit clearly gave housing a temporary boost,” said James Diffley, a managing director at IHS Global Insight. “How healthy is the remaining market?”
But November’s 830 closed sales locally are down 4.7 percent from 871 in October and are the lowest tally since April. Indeed, pending home sales here fell 12 percent from a year ago, to 425 from 482. That’s the lowest monthly total since last December and the lowest for November in at least a decade.
More significantly, pending sales plummetted from October, while lawmakers in Washington considered increasing calls from the real estate industry for them to extend the popular homebuyer tax credit.
The number of active listings locally fell 12 percent from a year ago to 4,893 from 5,567. New listings rose 9 percent from a year ago to 994.
“What happened in the month of November, everybody was on hold. That’s why units pending dropped,” Leonardi said.
Congress ultimately responded to the growing clam-our by extending the tax credit of up to $8,000 for first-time homebuyers until the spring and even expanded it by adding a credit of up to $6,500 for “move-up” buyers who have been in their current homes for at least five years.
In both cases, buyers can get a tax credit of up to 10 percent of a home’s price until that amount reaches the maximum of either $8,000 or $6,500. If the credit from a sale exceeds a buyer’s taxes due, the government will refund the remainder.
To qualify, contracts must be signed by April 30, and sales must close by June 30. Under the credit, first-time homebuyers include those who haven’t owned a home in the last three years.
As a result, real estate brokers and industry officials now expect the sales boom to continue and even pick up with the new group of eligible buyers. But they don’t expect the credit to be renewed again after April.
“This legislation will help stimulate a significant level of homebuying activity in the market and, more importantly, it will have a terrific impact on our economy,” said Linda Mallia, president of Hunt Mortgage, a unit of Hunt Real Estate Corp. “I caution all potential buyers that this is likely to be their last opportunity to take advantage of this generous tax credit.”
The median sales price in Buffalo Niagara rose 7 percent to $112,500 from $105,000 a year ago, while the average price was flat at $125,360, compared with $124,977 a year ago.
Total dollar volume of closed sales rose 2 percent to $90.89 million, up 2 percent from a year ago.
This report contains material from the Associated Press. e-mail:
jepstein@buffnews.com
advertisement
The Feed / What’s Happening Now
No sign of trauma detected in woman found dead
Police in Lewiston seek vehicle in fatal hit-run
Boy killed after darting into traffic is identified
Senecas hire Masiello's lobbying firm to fight state bid to expand casinos
Sabres show some gumption in beating Bruins
Woman, 24, found dead in car
Police raids target massive drug ring
Bills hire a quarterback mechanic in Lee
Sabres find the missing ingredients
Answers to the many questions in Le Roy
Ruff to remain in press box for awhile
Lady Justice’s blindfold gets thrown away
Stay Informed
Newsroom Tips
Have a news tip you think The Buffalo News should investigate?
Call The News tip line at 849-4475 or email us at investigations@buffnews.com.
All calls and emails will be kept confidential.
Buffalo Marketplace
Marketplace videos
Watch the latest offers, products and services from our advertisers.
Browse our print ads
It's the ultimate advantage for Buffalo consumers. Never miss another ad again!
Buffalo Savers: coupons
Buffalo coupons at your fingertips.
Just click and print. It's Easy!

